Category: Poverty

Solidarity Peace Trust, a faith-based non-governmental organisation in South Africa, has just released a report on the role of South Africa in the current Zimbabwean crisis. Since the implementation of the Zimbabwean government’s land redistribution program in 2000, the key contributors to the country’s GDP (agriculture, manufacturing and tourism) have collapsed. Unemployment is around 80%. Tourism earnings have halved. Agricultural production has contracted by more than 50%.

The economic crisis has forced many highly educated citizens to leave Zimbabwe, and this has precipitated the collapse of the health and education public service sectors. The recently passed Indigenisation Act requires majority ownership of all businesses to be transferred into indigenous hands, and this is expected to add to the wealth of the ruling elite, rather than addressing any of the economic problems.

South Africa has maintained a stance of “quiet diplomacy”, aiming to prevent “a complete collapse of authority in Zimbabwe”. Thabo Mbeki has opposed the use of economic sanctions, preferring a policy of appeasement. Meanwhile, a number of South African companies have found ways of profiting from the economic chaos in Zimbabwe.

Last week, the International Action Network on Small Arms, Oxfam international and Saferworld released a report entitled Africa’s Missing Billions, detailing the costs to Africa of armed conflict. In a recent post I argued that the extent of corruption in Africa is sufficient by itself to explain why Africa remains poor in spite of all aid efforts. The new report reveals that war by itself is also sufficient to explain why much of Africa remains poor.

The report reveals that armed conflict has cost Africa around $300 billion since 1990, an amount equal to the aid received from major donors. Wars, civil wars and insurgencies shrink an African nation’s economy by at least 15 per cent. There are the obvious direct costs of war as well as the indirect costs from lost opportunities and trauma.

The report concludes that there is an urgent need to reduce the international supply of arms and ammunition to Africa. The international arms trade provides a steady supply of arms and ammunition to African insurgents. If the supply of weaponry could be restricted, the costs associated with armed conflict would be similarly restricted.

Poverty which is caused by systemic issues can only be fixed when those systemic issues are dealt with. Throwing aid money at the problem often intensifies the problem, rather than helping to solve it. One of the systemic issues which causes poverty is bad governance, often including kleptocracy, nepotism, bribery, tribalism, intimidation, and absence of accountability.

An innovative way of dealing with governance issues has been proposed by Mo Ibrahim, a Sudanese-born mobile telephone entrepreneur who made his fortune through Celtel, which now operates in 15 African countries. Ibrahim has established the Mo Ibrahim Foundation, which last month published the Ibrahim Index of African Governance (in which 48 African countries were ranked according to various criteria), and later this month will announce the inaugural winner of the Mo Ibrahim Prize for Achievement in African Leadership (a prize of $5 million plus $200,000 per year for life, awarded to a former African head of state who has demonstrated excellence in African leadership).

According to Ibrahim, “We are shining a light on governance in Africa, and in so doing we are making a unique contribution to improving the quality of governance. The Ibrahim Index is a tool to hold governments to account and frame the debate about how we are governed.” It will be interesting to see whether his initiatives make a significant contribution to governance in Africa.

In Australia, the Reserve Bank controls inflation by adjusting official interest rates. When inflation is increasing, it can be brought back into line by increasing interest rates. This is unpopular with the general public, because if they owe money it means they have to pay more in interest, and they have less to spend on other things. Australia’s official rate is currently 6.5%, somewhat higher than that of the US.

In Zimbabwe, the central bank is planning to increase the lending rate from 650% to 800%, in a bid to stem runaway inflation. This sounds like an enormous interest rate. For every dollar you lend to someone at the start of the year, you get paid 8 dollars interest at the end of the year, leaving you with 9 dollars. But before you invest all your hard-earned money in the Zimbabwe economy, you need to know that inflation is running at about 6500%. This means that at the end of the year each dollar is worth one sixty-sixth of what it was worth at the start of the year, so even if you lend out money at 800% you still lose heavily in real terms. I’m tipping that the central bank’s adjustment of interest rates won’t be making a big dent on inflation.

How can people get by in times of rampant inflation? The answer is that poverty is spiralling out of control for Zimbabweans. There are extreme shortages of food, fuel and foreign currency (which is the only currency which retains its value). The only way to address the problem, according to standard economic theory, is for the government to slash its expenditure drastically. At present there are no signs of that happening.

One of the most obvious causes of poverty is “instability”, usually in the form of armed aggression by people who seek political power or wealth. A significant proportion of the poverty in Africa today is caused by “instability”, and a remarkable proportion of the instability is or has been perpetrated by persons trained at “World Revolutionary Headquarters” in Libya.

Charles Taylor, the Liberian warlord who became president of Liberia and is now on trial for war crimes, was trained and sponsored by Libya. Kukoi Samba Sanyang, who briefly became president of The Gambia after a coup in 1981, was another trainee. So was Laurent-Desire Kabila, who became president of Congo. Libyan-trained fighters were sent to fight for Yoweri Museveni in Uganda and John Garang in southern Sudan. Foday Sankoh, the rebel leader in the bloody Sierra Leone civil war, was another Libyan protege.

It is astounding to see how much of the misery and poverty which devastates Africa today is attributable to violence and terrorism perpetrated by people trained in Libya. It seems that a small amount of sponsorship in the wrong hands can have a bitter effect which lasts for many years.

According to Zimbabwe’s latest figures, inflation in the country was back under 7000% in August, after hitting a high of 7635% in July. The decline is due to a slow-down in the prices of food and alcoholic drinks, as a result of President Mugabe’s price-control program, which includes jail terms for anyone who raises prices or wages.

Unfortunately, conventional economic theory suggests that these types of price control measures have significant harmful effects. In an environment of rampant inflation, retailers must set their prices at a level sufficient to make a profit after allowing for inflation up until the anticipated date of sale. If legislation prevents them from doing this, they are unlikely to want to sell anything, and the shelves of the shops will be bare.

According to the International Crisis Group, Zimbabwe is close to complete economic collapse. 80% of the population are living below the poverty line, 25% have left the country, and food and fuel shortages are acute. Meanwhile, 83-year-old Mr Mugabe has vowed to “crush” his opponents in the elections due in 2008 – as if that is going to solve the crisis.

I have frequently been surprised to see people in Nairobi’s slums carrying mobile phones. It has always struck me as remarkable that people with an income so low that they are unable to afford an adequate diet should prioritise a technological gadget such as a phone over their own food and shelter.

Nonetheless, it seems that there is an important correlation between the use of mobile phones and increased economic prosperity. Better access to communications leads to “empowerment”, and a study has revealed that an increase of 10 mobile phones per 100 people could increase GDP growth by 0.6%.

According to a BBC news report, mobile phones will be made available to nearly half a million people living in rural poverty in Africa, in a move which is expected to boost the local economy and improve education and healthcare. Ericsson has donated the infrastructure and solar chargers for the phones.

In preparation for my team’s visit to Uganda later this year, I have made a video of an interview with Peter Ayabu, from Uganda. The video, which is hosted at globalchristianadventure.com, gives insight into some of the causes of poverty.

The video shows only a five-minute excerpt from our 30-minute conversation. At least three different primary causes of poverty were identified: pillaging by the LRA (Lord’s Resistance Army) rebel forces, conflict caused by other rebel activity, and sporadic raiding by Karamojong tribesmen. Insecurity was so great in 2004 that over 80% of the people in the Kaberamaido District of Uganda were living in refugee camps.

The people are still suffering from the traumas of violence, and the poverty caused by cessation of productivity during the times of insecurity. I am planning to take a team to Kaberamaido just after Christmas this year to help build a church building, and to encourage the people. More information at globalchristianadventure.com.

What should individual Christians be doing to address poverty? There are two parts to the equation: one is arranging the funding to tackle poverty, and the other is using those funds wisely. Whilst governments are able to provide the greatest amount of resources, a difficulty is that the larger the amount of funding available, the more difficult it is to spend that money effectively. I don’t believe governments will solve poverty.

God has provided Christians who live in the West with enormous personal wealth, when viewed on a global scale. The average income of an Australian over the course of a lifetime is around 200 times the income of a typical African. If you accept the Biblical principle that the resources which come under your control while you are on earth do not belong to you and you cannot take them with you when you die – you are merely a trustee for a limited period of time – then you will surely agree that as God’s trustee you should be allocating a significant proportion of those resources to the poor.

It is not enough for you just to send money to a charity and let them distribute it. You need to meet some people who are living in poverty. You need to learn from them about their struggles and how to see the world through their eyes. You need to smell the smells of the slums, and to walk for a while in the shoes of the poor. You need to take their advice on how to assist them, and you need to be humble enough to listen to their criticism as you make mistakes along the way. And along with your money, you need to give yourself.

It’s hard to believe that there are still places on the Earth where angry men with AK47 rifles might appear at any time, killing, raping and plundering anyone in sight. It’s even harder to bear the knowledge that one of those young men might be your own son, abducted a few years ago as a child and brainwashed into a culture of fear, violence and superstition.

That’s how things have been for many years in northern Uganda. Perhaps it’s coming to an end, but the future is very uncertain. Joseph Kony is the spiritual leader of the Lord’s Resistance Army, conjuring magic to make his followers immune to bullets. The LRA sustains its rebel activities by kidnapping boys and brainwashing them by exposing them to slaughter and extreme violence. Girls are kidnapped for use as sex slaves. No-one really can remember what they are rebelling against.

As a result of the constant insurgency, the people in northern Uganda are extremely poor, and they have lived in a state of constant trauma for many years. Now that the insurgency might be coming to an end, they need to work out how to treat the perpetrators of the crimes, bearing in mind that the perpetrators are their own sons, brainwashed and unrecognisable as a result of the terror which they have endured.